Search smh:

Search in:

Market flat on Japan's expansion news

Stephen Johnson

THE Australian share market has closed flat as investors gave a subdued response to the Bank of Japan's plan for a more expansionary 2 per cent inflation target.

At the close on Tuesday, the benchmark S&P/ASX 200 Index was up 1.6 points, or 0.03 per cent, at 4779.1 points, and the broader All Ordinaries Index was 0.7 points, or 0.01 per cent, higher at 4802.9 points.

On the ASX 24, the March share price index futures contract fell one point to 4742 points, with 26,684 contracts traded, final calculations show.

The Bank of Japan said it would conduct ''open-ended'' asset purchases to help end a long period of deflation, and described its inflation goal as a ''price stability target''.

Still, Bell Direct market analyst Julia Lee said the Australian market had already expected the news, following a meeting of Japan's central bank.

''It's good news for the Japanese economy but the market has priced in the news,'' she said.

Of the big banks, National Australia Bank shares finished almost 1 per cent weaker after Spanish giant Santander had denied it was interested in buying its troubled UK banks.

Investors had pushed NAB shares up on Monday after London's Sunday Times reported that Santander was considering making a £2 billion ($3.04 billion) offer for the Yorkshire and Clydesdale banks. But the share price dived after a Santander spokesman denied the report.

NAB shares lost 26¢, or 0.97 per cent, to finish the session at $26.59.

ANZ also went backwards, shedding 3¢, or 0.12 per cent, to finish at $25.66.

But Commonwealth Bank inched up by 34¢, or 0.55 per cent, to end at $62.54 while Westpac added 1¢, or 0.04 per cent, to touch $26.49.

In resources, Macmahon Holdings initially soared more than 15 per cent after the mining contractor sealed a $1.8 billion deal with Fortescue Metals Group.

The five-year contract is the biggest signed by Macmahon in the mining services sector and will see it provide services to help Fortescue expand its Christmas Creek iron ore mine in WA.

Shares in Macmahon finished up 1.5¢, or 5.88 per cent, to hit 27¢ while Fortescue shares ended 11¢ higher, or 2.43 per cent, at $4.64.

Ms Lee said Australian share market volumes were expected to pick up on Wednesday as the US returned from the Martin Luther King jnr public holiday.

The price of gold in Sydney was $US1693.83 per fine ounce, up $US3.72 on Monday's closing price.